(Bloomberg) -- Over the past six decades, Autry Stephens has worn nearly every hat in the oil industry, from trucker to driller to engineer. 

Now he’s poised to don the crown of America’s richest oil tycoon.

On Monday Diamondback Energy Inc. agreed to buy Stephens’s Endeavor Energy Resources LP for $26 billion in cash and stock. The sale would vault Stephens to 64th place from 130th on the Bloomberg Billionaires Index of the world’s richest people, making him the wealthiest oil driller in the country with a net worth of $25.9 billion based on the current Diamondback share price.  

A fortune that size would surpass the net worth of Continental Resources Inc.’s Harold Hamm, at $15.4 billion, and Hilcorp Energy’s Jeff Hildebrand, who’s worth $17 billion. Charles and Julia Koch, owners of conglomerate Koch Industries are richer, though oil makes up just a portion of their diversified fortune. 

The Endeavor sale is expected to be completed in the fourth quarter. 

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The deal ends years of speculation over who might buy Endeavor, one of the last remaining closely held, major producers in the shale-rich Permian region. The son of peanut-and-melon farmers, Stephens, 85, founded the Midland, Texas-based company in 1979 after working for Humble Oil, now part of Exxon Mobil Corp., and stints with the Army Corps of Engineers and a Midland bank as an oil-and-gas appraiser.

At first his nascent business focused on providing ad-hoc engineering help. It expanded over time to include trucking, well services and roustabout construction. One constant was buying drilling rights in Texas and never selling. Stephens bought his first Permian rights shortly after leaving the bank and continued even as production declined through the 1980s and 1990s, when major oil companies left for more lucrative opportunities overseas. 

His insistence on using cash rather than debt to acquire drilling rights helped him survive the 2008 financial crisis, which crushed oil demand and bankrupted some US operators. Stephens was forced to shut down almost all of his rigs. The strategy paid off when oil rebounded to more than $100 a barrel soon after. 

But it was the advancement of horizontal drilling and hydraulic fracturing that revolutionized the fortunes of the US oil industry — and few were better placed to benefit than Stephens. He eventually assembled drilling rights to 344,000 acres, about 400 times the size of Central Park, in the core of the Permian Basin. 

“That’s as good as any acreage in North America,” Kaes Van’t Hof, chief financial officer at Diamondback, told analysts and investors during a conference call announcing the deal. “Mr. Stephens has been working leases in this basin for 45 years, and a lot of those leases were bought before we even existed at Diamondback.” 

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As the majors returned to the Permian in the 2010s and domestic oil drillers grew, speculation grew as to when Stephens would sell out or take Endeavor public. Despite overtures from bankers and potential acquirers, he resisted, preferring to grow production himself. Endeavor eventually became “the crown jewel of private companies in the Permian Basin,” according to John Freeman, a Houston-based analyst at Raymond James Financial Inc. 

People close to Stephens praise his work ethic and commitment to the Permian even through the major oil price busts of 2014 and 2020. 

The sale terms mean Stephens will keep a foothold in the industry he spent his life’s work shaping. After the merger, Stephens and his family — Endeavor’s sole equity holders —  will own just under 40% of the combined company. He’s also poised to receive $8 billion in cash. Stephens’ daughter Lyndal Greth, an attorney, is vice chair of the Endeavor board. 

After decades controlling Endeavor, Stephens will not join Diamondback’s board of directors to help steer the combined companies, according to a person familiar with the matter. Stephens trusts Lance Robertson and Chuck Meloy — Endeavor’s current and previous CEOs — who will join Diamondback’s board, the person said.

Other terms of the deal also comforted Stephens. Endeavor employs 1,200 people and guaranteeing no layoffs was important for the founder, as was keeping the company in Midland, the person said. The fact that the acquiring company is headquartered across the street, with a boss in Travis Stice whom Stephens has known for many years, were key. 

Stephens also saw parallels with the companies: a similar ethos focused on maintaining a lean staff, running efficient operations, and improving both the oil business and the wider Midland community.

--With assistance from David Wethe.

(Updates with Diamondback CFO’s comment in 10th paragraph, analyst’s remarks in 11th paragraph.)

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